Europe’s Social Contract, Lying in Pieces

A homeless woman in Athens. With millions in Greece and the rest of Europe facing long-term poverty, fringe movements are rising.Credit
Petros Giannakouris/Associated Press

What began as a debt and currency crisis in the European Union risks becoming a crisis of liberal democracy itself. Four years of grinding austerity across much of the Continent has caused millions of middle- and working-class voters to lose faith in the ability of mainstream political parties to protect their basic interests. It would be a sad paradox if the European movement, conceived in the ruins of fascism and two world wars, and for decades democracy’s best advertisement to the Communist East, undermined its democratic achievements in pursuit of a perverse economic dogma.

With few exceptions, Europe’s mainstream center-left parties, which long positioned themselves as defenders of society’s most vulnerable, are taking it in the teeth politically. The Democrats in Italy, the Socialists in France and Spain, and the Greek socialist party known as Pasok, having committed to many more years of cuts in social spending, are increasingly out of touch with the desperate situation of young people without job prospects, homeowners unable to keep up with their bills, and older workers facing long-term unemployment, later retirement ages and pension cutbacks.

The victims are visible almost anywhere you go in Mediterranean Europe. You see shuttered groceries and clothing shops, abandoned restaurants, idled factories and half-built housing developments overgrown with weeds. Newspapers carry heartbreaking stories of families evicted from modest apartments, people losing their jobs and then their health benefits, young and not-so-young women turning to prostitution to make ends meet, even suicides by self-immolation.

Most people in Greece, Portugal and Spain personally know someone whose former middle-class life has been destroyed by the combined effects of recession and government austerity policies. In the midst of this destruction, many mainstream politicians still prefer to pretend that this is just a normal business-cycle downturn that will pass.

The European Union’s recent offer to let Spain, France and five other hard-pressed nations extend their budget-cutting deadlines is not nearly enough. These countries need to stimulate their economies, not merely slow down their economic contraction. (And while it is refreshing that the International Monetary Fund now acknowledges that it underestimated the negative effects of Greece’s first bailout and austerity program, it shows no inclination to reduce the similarly negative effects of the successor program now in place.)

Perhaps it is not surprising that millions of disillusioned supporters of centrist parties now cast protest votes for populist fringe movements that echo popular anger even though they offer few practical policy alternatives. Movements as diverse as Greece’s neo-fascist Golden Dawn, Italy’s anarchist Five Star Movement, France’s anti-Arab National Front and Britain’s Europhobic United Kingdom Independence Party have little in common ideologically. Their one shared feature is that they have little respect for the liberal democratic values that have defined and shaped postwar Europe. And growing electoral support is turning them into powerful players.

Last year in Greece, and this year in Italy, protest parties attracted so much support that no mainstream party emerged from national elections with enough votes to form a government. Italian politicians and newspaper editors who once dismissed the Five Star Movement as a joke led by a former comedian have been forced to change their tune. Many voters see it as an alternative to traditional parties that have made their lives worse by endorsing tax increases for working- and middle-class families, higher utility bills and delayed retirement eligibility.

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Both Greece and Italy eventually cobbled together unnatural and unstable coalitions of recycled center-left and center-right politicians, many of whom had spent two decades attacking one another’s morals and integrity. It is hard to imagine how these odd-couple coalitions can rally public support for politically difficult structural reforms.

After World War II, Socialist and Christian Democratic parties jointly fashioned safety net programs that reduced poverty, enhanced living standards, reduced inequality and made European social policy the envy of much of the developed world. That social contract now appears to be shredded.

Europe’s conservative parties, like Republicans in the United States, have, for the most part, turned into shrill apostles of austerity at almost any social cost. The shock is that European socialist parties have largely shrugged and acquiesced, instead of fighting to protect their traditional constituents. For that, they are paying a stiff political price, though their ouster from power is scant consolation for the millions of Europeans facing the long-term prospect of poverty and despair. Given how the European Union is structured, German austerity policies might have prevailed anyway. But its victims would not have felt as politically abandoned as they do today, nor as tempted by anti-democratic fringe movements.

Mainstream center-right parties like Britain’s Conservatives and France’s Union for a Popular Movement cannot afford complacency either. Right-wing groups like Golden Dawn, the National Front and the United Kingdom Independence Party are successfully wooing away many of their voters, and imitating those parties’ immigrant-bashing and Europhobia will not do much to stanch that flow.

The Germans, too, should be nervous. They have benefited from the austerity policies in a temporary and narrow sense, by reducing the tax burden of bailouts and gaining an export edge from the rest of the euro zone’s weakness. But these policies are perhaps irrevocably changing the Europe that Germans live and trade in. While the debt crisis seems to be in temporary remission for now, the larger crisis of European governance and democracy is visibly deepening.

In the decades after the First World War, most continental European governments responded to economic crisis with variants of austerity and ended up losing liberal democracy. That is a history that Europe must take care not to repeat.